I Heart Netbooks

There was an interesting piece on Tech Crunch a couple weeks ago that I have been thinking about since. The premise is that with lower cost netbooks selling well, Intel is suffering. That's because these low cost low tech machines don't need big ass computing power from a top of the line dual core processor. They do just fine on a (much cheaper and lower margin) Intel chip. Here's an excerpt:

That means that for the most part, every Netbook sold is one less Dual Core that Intel can sell at a higher price and higher margin. Which explains exactly why the company has been publicly criticizing the performance of the machines. “If you’ve ever used a Netbook and used a 10-inch screen size–it’s fine for an hour. It’s not something you’re going to use day in and day out,” said Intel VP Stu Pann at an event last year.

Intel also wants to keep Netbooks at 10 inches or less. Some PC companies we’ve spoken with say that Intel doesn’t want Atom chips in devices bigger than 10 inches, and puts incredible pressure on them to keep Netbooks at 10 inches or less.

I had the good fortune to be able to play with a friend's tiny Asus netbook last weekend, and I liked it loads. Yes, there are limitations, but the thing is, I generally don't play twitch games with a bajillion polygon rendering; I don't try to run TV through my PC. I don't use much beyond Word, Excel, and PPT, and would be happy to use stable, lighter facsimiles to save hundreds -- and indeed to be able to open my computer on a plane.

So to me, the real question is, are we at a crossroads where the classic tradeup for more power and speed just plain isn't relevant anymore? When a person's gaming world is solitaire or online bejewelled, and when 65% of what they do on a computer is email and Google, why SHOULD they buy high end PCs? One some level, one could ask the same thing about 60 inch TVs, though. Not necessary, but (for many) pleasant.

I think the PC market is going to be fascinating over the next 18 months. I foresee a giant netbook business exploding at the forefront, and high end PCs doing just fine with gamers and the like. It's the $1000 midmarket PCs that are going to suffer, and suffer bigtime.

Thanks for reading, and don't forget to write.